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Wednesday, February 15, 2012

Your share of the national debt = $135,000!

Tom Smith is running for Senate in PA. I saw his commercial on TV this morning. In the commercial, he states that each person's share of the national debt is $135,000 without any mention as to how he came up with that number. I had never heard that number used before, so I went looking for the explanation. I think I found it and wrote the following on Tom Smith's Facebook page regarding the statistic. http://www.facebook.com/TomSmithForSenate

Mr. Smith,
First of all, thank you for your willingness to serve the public. I
saw your TV spot today and viewed it again online. I also took a look
at your position on the issues and agree with you in regard to term
limits. I also agree that our national debt is a concern; however, I
disagree with the way you state the problem in your commercial. I
understand that the point of your commercial
is to grab people’s attention but you don’t want to misrepresent the
facts, right? If you misrepresent the facts and are called out to
explain, some might wonder if you purposefully exaggerated the facts for
political advantage or if you don’t understand these important issues
which call into question your credentials for the job.

You
state in the commercial that “everyone’s share” of the national debt is
$135,000 but you don’t say who you consider everyone. Everyone would
make most people think citizens. If your calculation represented
citizens, then each citizen’s share of the national debt is around
$49,120. The national debt = $15,355,198,335,393.66 (2/13/2012 –
treasury.gov) and the estimated population of the US. = 312,602,730
(12/1/2011 – census.gov). Did you know that the average US citizen has a
little over $50,000 of personal debt (mortgage+loans+credit cards) so
combined, total debt obligations for each citizen are significantly
lower than your number.

I’m assuming your number comes from
taking the national debt and dividing it by the number of “individual”
taxpayers who paid income tax? Therefore, you’re saying that only
taxpaying Americans are unfortunate enough to be on the hook for the
entire national debt. Really, is that true or does $135,000 sound a lot
worse than $49,000?

Don’t you propose to significantly cut
spending to reduce the debt? You would have to if you plan to lower
taxes too. Maybe cut a little from Medicare, education, national
defense, environmental protection, etc… don’t these policy decisions
have the potential to negatively affect all citizens? Don’t all citizens
share in the cost of the national debt? Kids don’t pay taxes so
they’re not on the hook for the national debt? The poor? I guess you’re
also planning to eliminate corporate taxes because your number cannot
include corporations who pay taxes.

Again, I don’t disagree
with you about the national debt being a growing problem and that
decisions to reduce the debt will be difficult, $49,000 is still a lot
of money. What I disagree with and find unacceptable of politicians,
even politicians who claim "not" to be politicians like you, is their
inability to explain the facts to the voters and their reliance on “the
party’s” spin to exaggerate the issue for political advantage. You
claim to be better than that.

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Mike Gumpper, Professor of Economics @ Millersville University

I am a professor of economics at MU, one of the state system universities in Pennsylvania. I am also the director of the Center for Economic Education. In my role as professor, I teach microeconomics, environmental and health economics, and public finance. As the director of the CEE, I help k-12 teachers learn how to apply and teach economics and finance. My passion is economics and helping people understand the economic way of thinking.